Chairman says Democratic Party may amend disclosures of contributions and expenses

5/17/02
By EDDIE CURRAN Staff Reporter

Alabama Democratic Party Chairman Redding Pitt said Thursday it may be necessary for the party to amend past disclosures of contributions and expenses to reflect how some lottery-related loans were repaid.

The problem, Pitt said, is that the party apparently doesn't have records of what appear to be at least two loans and possibly more used to fund a get-out-the-vote campaign in support of the October 1999 lottery referendum.

"We keep loan records, it's just this particular one, we have no records of," said Pitt, who served as the U.S. attorney in Montgomery until taking the party's helm.

"I was not present during any of these events and I have no direct knowledge of them," he said. "However, I am the current chairman of the Democratic Party, and I am currently the person responsible for its institutional integrity."

The Democratic Party spending, reported by the Mobile Register on Thursday, reflects that the'99 lottery campaign, spearheaded by Gov. Don Siegelman, cost somewhere between $700,000 to $1 million more than the approximately $5 million reported to the secretary of state's office by the Alabama Education Lottery Foundation in its filings.

The foundation, set up by the governor to receive donations and finance the ultimately failed lottery effort, filed its final disclosure in January 2000 showing a zero balance. The Democratic Party's arrangement with the foundation was not disclosed to the public at the time.

Given the amount of money involved and the questions that remain unanswered about the Democratic Party's role, there may be numerous lottery-related donations by lawyers, political action committees, businesses and individuals that remain undisclosed.

In the past 18 months or so, news stories in the Register and other papers have reported that some of the companies that have received lucrative state contracts, often without facing competition, donated to the governor's campaign or the lottery effort.

On Thursday, the Register reported that the foundation, the entity used by Siegelman to raise money for the lottery campaign, had contracted with or in some way agreed to pay the party for a get-out-the-vote campaign prior to and on the day of the lottery vote.

Giles Perkins, who served as executive director of the party during the lottery campaign, said this week he was unable to provide details of the loans, or cite the source of their ultimate repayment. He said he left the position shortly after the lottery vote, which was more than two years ago.

But Perkins said he was certain that someone with the foundation - he couldn't recall who - pledged that the foundation would re-pay the money. It's his understanding, he said, that the foundation did re-pay the party's lottery-related debts.

"We set up a segregated account for the foundation, and then the party invoiced the foundation and was paid for the value of the services," he said.

Perkins now works as an attorney for the law firm Miller, Hamilton, Snider & Odom. A founding partner of the firm, Jack Miller, was the party's chairman during the lottery campaign and after it. Miller, whose firm has received significant amounts of state work during the Siegelman administration, did not return calls made to his office Wednesday and Thursday.

Pitt, who spoke with the party's bookkeeper, said there are no records at the Democratic Party's offices showing the lottery campaign expenditures separate from the party's overall expenses.

The party disclosed its loans, contributions and expenses in its required filings with the Alabama secretary of state's elections office, but there's no way to determine which transactions, including loans, were lottery-related or were not, Pitt said.

The party's disclosures show a $400,000 loan from Colonial Bank in August 1999, and another, for $300,000, made days before the referendum. Another loan, for $212,900, was taken out with First Commercial Bank of Birmingham, apparently in March 1999. The disclosures show other, smaller loans as well.

Pitt and Perkins couldn't say for certain, but both said they believe the First Commercial loan was unrelated to the lottery effort.

Previous Register stories have reported that a PAC run by the investment firm Sterne, Agee & Leach disclosed that in January 2001 it made a $13,500 donation to First Commercial Bank, to help pay off a loan of the foundation.

Company officials have declined to say who sought the contribution, or directed them to make it to the bank; and foundation officers contacted by the paper said they were unaware of any activities by the foundation since it was dissolved shortly after the referendum.

Siegelman pledged during a visit to Mobile on Wednesday that he will make sure that the Register's requests for a full accounting of lottery-related donations and expenditures is provided as quickly as possible.

The governor, who is running for re-election, has said he once again wants to pursue a lottery to fund education in Alabama.

Pitt, quoted in Thursday's story as saying the party doesn't maintain receipts, said he wanted to clarify that comment by saying that the party keeps "exact records of money that comes in and money that goes out."